Headquartered in Munich, the BMW group is a German holding company which mainly

produces luxury automobiles. The group is currently ranked 51st among the 500 largest
companies by Fortune magazine, with $ 111,231 million in revenues and a profit of $9,716.6 in
2018. In an attempt to understand BMW groups’ future prospects it is important to consider the
company’s external environment by analyzing both the industry and the company’s competitors.
Regarding the industry environment, in terms of economy, much of BMW’s growth has been
driven by increased sales in China. However, China experienced the slowest economic growth
28 years in 2018 which coupled with the government’s austerity measures and opposition to
flamboyant spending could limit sales (Jourdan & Shirouzu, 2016). On the physical environment
and sustainability, in an era of increased environmental awareness, the BMW fined $11.6
million after it was found guilty of installing wrong emissions software on some of its cars. The
company also had to recall 11,700 cars (Taylor & Busvine, 2018). This has tarnished the
company’s image worldwide and diluted customer trust. Notwithstanding, the company has been
increasing research and development funding over the years and has managed to effectively
penetrate the electric car segment, selling 64,993 units in the first half of 2018 while the segment
leader Teasla, sold 91,201 units (Kane, 2018). While the niche is expected to grow, BMW faces
stiff competition from new companies like BYD who offer cheaper products(Pressman, 2018).
Recently, the United States has been threatening to increase tariffs on European and Chinese
products. In response, China has threatened to impose a 25% tariff on U.S. - made cars,
including BMWs (Carey, 2018). Given BMW exports cars from Europe to the United States and
that it manufactures some model in the U.S, the already expensive vehicles may be rendered
unaffordable to many potential customers in the U.S and China.

References
Carey, N. (2018). Tariffs on U.S.-made models will mean pricier BMWs in China. Retrieved
from https://www.reuters.com/article/us-usa-trade-china-bmw/tariffs-on-u-s-made-models-
will-mean-pricier-bmws-in-china-idUSKBN1JW1YV
Taylor, E., & Busvine, D. (2018). BMW to recall 11,700 cars after installing wrong engine
software. Retrieved from https://www.reuters.com/article/us-bmw-emissions/bmw-to-recall-
11700-cars-after-installing-wrong-engine-software-idUSKCN1G728U
Jourdan, A., & Shirouzu, N. (2016). China hikes tax on 'super cars' amid luxury crackdown.
Retrieved from https://www.reuters.com/article/us-china-autos-tax-int-idUSKBN13Q315
Kane, M. (2018). Tesla Shines In Global Plug-In Electric Car Sales Stats For July. Retrieved
from https://insideevs.com/tesla-global-plug-in-car-sales-july/
Pressman, M. (2018). Are China's electric cars a threat to Tesla?. Retrieved from
https://evannex.com/blogs/news/are-chinas-electric-cars-a-threat-to-tesla
Yao, K. (2019). China set to post slowest growth in 28 years in 2018, more stimulus... Retrieved
from https://www.reuters.com/article/us-china-economy-gdp/china-set-to-post-slowest-
growth-in-28-years-in-2018-more-stimulus-seen-idUSKCN1PE02Z